“Where are we with the French nation start-up?”, Claude Calmon (Calmon Partners)

Just five years ago, the President of the Republic wanted to make a starting country with an ambitious project: 25 unicorns in 2025. The bet has been won by hand because in January 2022, France celebrated the birth of the 25th company worth more than a billion dollars. However, despite the technological boom and the emergence of new digital companies, the French market remains small compared to our German or British neighbors. France is accelerating, of course, but it is also about to catch up.

Similarly, more than 40% of the fundraising in 2021 was done by 15 companies and it is series B and C, i.e., the companies are stable and stable. On the other hand, the number of investments in young projects decreased. The ideal is for smaller companies to have access to financing because we are still very far behind the number of American unicorns, and even the British.

This difference in the Anglo-Saxon world can be seen in the behavior of French investors. In fact, very few of them participated in emerging projects; start-ups often have a hard time convincing business angels, who are more cautious than American investors. The solution is to seek financing abroad. But there, entrepreneurs are resisting a cultural and economic blockade. Foreign investors don’t want to risk putting their money in an environment whose codes they don’t necessarily master. Therefore, it is important to support start-ups from the beginning, but in order to do this, the French market needs to change.

The administrative complexity

Faced with the lack of confidence of investors to finance young projects, entrepreneurs turned to public-assistance: therefore the role of the BPI is very important. However, despite some measures put in place by public authorities, start-ups often still struggle to raise funds. Public assistance is certainly encouraging, but it’s more about covering fees than the new money that will generate as a business angel would do when he or she invests in a company.

Administrative complexity in France still often prevents young companies from knowing what their rights are or how to compile the file. Going to the end of the process has become almost a full-time job. Unfortunately, we don’t have the venture capital environment of Americans, who take more risks because it’s in their culture.

To overcome this impasse, it is necessary to facilitate access to credit and financial facilities in order to have access to investors at the right time. In France, there are huge vacancies in funding projects up to one million euros. Our French investors must be stuck in the very Parisian interpersonal environment where they supply themselves between people with the same seraglio. We won’t have a boom in the economic fabric of start-ups if investors always fund the same type of companies. So feel free to look international. Franco-French projects are complicated because we are a small market. It doesn’t matter if a French company entrusts part of its capital to international investors and ultimately, the founder is the only French remaining.

Change the status of the contractor

To accelerate the development of start-ups, it is also important to change the status of the entrepreneur in France. When you are a business manager but not an employee, your financial situation, in the eyes of a bank, is not clear. And that’s not normal. If you do not have a pay slip, it is impossible to rent an apartment or get a bank loan. An unfavorable environment makes things worse.

In France, we still often have this view that a successful entrepreneur is a business leader who has raised a lot of funds. However, keep in mind that when you offer some of your capital to investors, your business is lower and lower. We must continue to encourage the major players of the economy because they create jobs, but we must also support small structures because, even more slowly, they are the ones recruiting and sustaining the economy.

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